Treatment of malonates without a substituent at the active methylene moiety with terminal alkynes gave salicylates regioselectively. In contrast, when malonates bearing a substituent at the active methylene moiety were used, cyclic β-keto esters were generated regioselectively. Treatment of the formed cyclic β-keto esters with In(OTf)3 gave phenol derivatives via decarboxylation.